Australia’s Assistant Treasurer, Nick Sherry, has announced that Australia and Chile have signed a comprehensive bilateral double taxation agreement (DTA) – the second such agreement between Australia and a South American country.
The signing of the DTA had been delayed due to the earthquake in Chile on February 27, and the Australian government thanked the Chilean government and its officials for being able to bring the agreement to a conclusion in difficult circumstances.
"The new income tax treaty between Australia and Chile will provide certainty and stability of tax treatment for Australian and Chilean cross-border investors and reduce tax-related barriers so the economic relationship between our countries can continue to grow," Sherry said.
"Chile is a major destination for Australian investment, especially in the mining sector. The signing of this historic tax treaty is a great step forward for Australian businesses,” he continued. “It will help maintain the integrity of Australia's tax base by allowing the exchange of taxpayer information, including bank information, between Australian and Chilean tax administrators."
The provisions of the new DTA with Chile will also include reductions in source-country withholding taxes on certain cross-border payments of dividends, interest and royalties; and rules to determine when an enterprise or an individual of one country may be taxed on its activities abroad. There will be an agreed basis for determining the allocation of profits within a multinational company to reflect the transfer pricing that would be adopted by independent parties.
There will be a general obligation for both countries to relieve double taxation on cross-border income by permitting tax paid under the other country's laws, and in accordance with the DTA, to be allowed as a credit against tax payable under their own laws. Special rules will preserve the application of existing tax arrangements between Chile and Australian companies under the provisions of Chilean legislation. This is of particular importance to Australian mining companies with investments in Chile.
Legislation to give the new treaty the force of law will be introduced into the Australian and Chilean parliaments as soon as is practicable, Sherry informed.A comprehensive report in our Intelligence Report series, examining in depth the situation of offshore transparency and secrecy in a number of the most prominent jurisdictions, is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report2.asp
Kazakhstan's President on April 9 signed legislation ratifying a protocol to the DTA with Belarus.
Macau's Office of the Chief Executive on April 3, 2018, issued Order No. 63/2018 authorizing the conclusion of a DTA with Vietnam.
Latvia and Chile discussed launching DTA negotiations during a two-day meeting that concluded on April 10, 2018.
Finland's President on April 6, 2018, authorized the signature of a DTA with Hong Kong.
Austria's Federal Council on April 5, 2018, approved the DTA with Japan.
A protocol updating the DTA between India and Kazakhstan entered into force on March 12, 2018, and was published in India's Official Gazette on April 12, 2018.
Finland is proposing to terminate its existing DTA with Portugal at the start of 2019, should Portugal fail to ratify a replacement DTA negotiated between the two states.
The Spanish Senate on April 11, 2018, approved a DTA with Finland.
The Czech Senate on April 4, 2018, approved a law to ratify the DTA being negotiated with Kosovo.
Singapore on March 13, 2018, announced plans to update the DTA with Bangladesh signed in 1979.
Cambodia and Vietnam on April 5, 2018, signed a DTA.
A DTA between India and Zambia was signed during a three-day visit Zambia ending April 12, 2018.
Kosovo on April 4, 2018, approved negotiations towards a DTA with Saudi Arabia.
The Assistance in Recovery clause in the DTA between Australia and France entered into force on April 1, 2018.
The Saudi Cabinet on April 3, 2018, approved a DTA with Hong Kong.
Bangladesh and Azerbaijan on April 6 agreed to speed up negotiations towards a DTA.
South Korea and Vietnam on March 25 agreed to work towards amending their DTA.
The Moroccan upper house of parliament on April 5 passed draft Law No. 22.18, endorsing a DTA signed with Bangladesh.
At a March 15 meeting, representatives from Hungary and Ecuador discussed engaging in talks towards the conclusion of a DTA, Hungary's Ministry of Finance reported on March 21, 2018.
On March 21, 2018, Nigeria completed its domestic ratification procedures in respect of the DTA signed with Singapore.
Kazakhstan's Senate on March 29, 2018, approved a law to ratify the DTA signed with Belarus.
During a meeting on March 29, 2018, representatives from Kenya and Mozambique agreed the two countries should agree a DTA.
Georgia and Saudi Arabia signed a DTA on March 14, 2018.
Turkmenistan and the United Arab Emirates signed a DTA Protocol on March 15, 2018.
India and Hong Kong signed a DTA on March 19, 2018.